Education Is Not A Debt Sentence!
The opening date for FASFA is just around the corner and a reminder that it’s time to cough up some money for next year’s tuition. Gosh, I have been out of college for almost seven years and I am still paying for my education. I respectfully declined a full music scholarship and a full academic scholarship from a well-known school once I got an accepted to the number one HBCU in the country, Spelman College. Although, my premium education came at a hefty price tag, I still believe it was one of the best life decisions I have made thus far. No matter how you look at it, college is expensive and the inflation for tuition fees is increasing at an alarming rate. As an result of the yearly increase, parents and students alike are getting creative in how they pay for higher education. According to the US Department of Education, the average annual cost of public school increased 6.5 percent each year over the last decade. That means that by 2030, annual public tuition will be $44,047 and the total cost for a four-year degree will be more than $205,000. I don’t even have children and that number makes my head hurt…especially when I hope that my hypothetical future daughter will continue the Spelman College legacy. If the price of a four-year degree from a public institution is projected to cost almost a quarter of a million dollars, then I can only image how much a private college will be. You need to get an education to make more money, but you can afford to pay for the education; hence the newest Debt Crisis No One Is Talking About. Grants and scholarships are the best ways, in my opinion, to pay for your education because you don’t have to pay them back. If grants and scholarships aren’t an option for you, your child, or any student you know who is struggling to fund their education, maybe one of these options will work !
529 Plans & Registered Education Savings Plan
A 529 plan is a college savings plan sponsored by a state or state agency for anyone with a Social Security number or a Tax ID. Money saved under a 529 Plan can be used for education related expenses like tuition, books and room and board for most US schools and select schools abroad. According to Clark Howard, another one of my favorite money gurus, “529 plans must be sponsored by a state even though residents of most states can put their money in any state plan. Just because you invest in the plan of a state where you don’t live, that doesn’t mean your child will have to eventually go to school in that state.” While you can get access to the money at any time, doing so for any non-education related reason will result in you paying a penalty fee. Otherwise, you pay no federal taxes on the account’s earnings and you may qualify for state tax benefits as well. Another option, for my readers to the north, is a Registered Education Savings Plan (RESP). Similar to a 529 Plan, the RESP is a great savings option that encourages investing in a child’s future post secondary education because any income earned in an RESP is tax exempt until it is withdrawn. This plan is sponsored by the Canadian government who contributes a certain amount to plans for children under 18 years old. The earlier you start contributing to the RESP and a 529 Plan the sooner your money will stay in the plan and compound over time. Seriously, there is nothing better than FREE money! Similar to the 529 Plans of the US, RESPs offer tax incentives, are tax tax-deferred, and allow multiple people to contribute.
Passport to an Affordable College Education
This may sound extreme, but lower tuition costs in other countries are luring American students to top-rated British and Canadian colleges. According to NBC News, “The total amount of student loans owed went over a trillion-dollar mark late last year, surpassing total credit card debt in this country for the first time. More and more American families are finding a solution to the high cost of higher [education] by looking to our north [Canada]”. The number of Americans attending Canadian universities has risen 50 percent in the past decade, and the reason is obvious: cost. Study abroad programs are a very popular option for students so I don’t think that actually attending school outside of the US would be far-fetched for some… especially if your choice is between attending a school that you can afford or not attending school at all.
Start a Website
I have a childhood friend, Amber, that I lost touch after moving to a new neighborhood at nine years old. It wasn’t until Facebook became the go to source of information that we were able to “find” each other again and reconnect. Earlier this year, a link popped up in my Facebook timeline about Amber and her dream to attend Harvard. I clicked the link and was more than impressed with what I saw. Amber created not one but two websites to get the word out about her financial goals to fund her dream school. Amber created her own website “Get Amber To Harvard” to tell the story of her educational journey and her financial goals and an online donation website on the site, Go Fund Me. On her GoFundMe site, Amber has already raised $22,480.00 of the $70,000.00 goal. Check we say Cha-Ching!!
Would You Go to College Abroad to Save Money?
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